F
uture fleet dynamics in the MPV space have been a major topic of discussions in the sector, with increasing demand expected but newbuild order activity still being tepid. This topic has been scrutinised in detail in Drewry’s latest Multipurpose Shipping Forecaster report.
In recent quarters we had to add more vessels to our theoretical MPV orderbook to balance other elements of our model. These additional vessels do not yet exist; however, it is our expectation that the growing demand outlook will incentivise further real-life newbuilding orders.
With low slot availability and the time required to build the various types of vessels that make up the MPV fleet we see the near term orderbook as set and have not added any additional vessels for delivery in the years 2024 and 2025. Even if we see an uptick in newbuild ordering in the next two years, it is unlikely those additional ships would get delivered before 2027, leading to a tight market in 2026/27, especially in the Project Carrier segment.
With the help of our model, we have also examined what happens if there are no additional orders during our forecast period and this led to climbing utilisation and time charter rates. We expect that the nature of the upcoming upturn will be different from 2021/22 in a sense that the high utilisation and TC rate levels will be achieved exclusively by demand generated in the sector, without the additional “help” from container shipping. This should increase the appetite for more MPV newbuilds. But we also must consider that theoretical additions of vessels may not be achievable as time moves on. With slot availability showing later and later delivery dates, slippage and the normal time taken to build a vessel, we must adjust the model each quarter and fore-estimate TC rates as it becomes unlikely that vessels will be delivered by the time we forecast they are needed. While other sectors competing for general cargo (such as dry bulk, cellular containerships, car carriers) will likely alleviate the expected supply crunch of MPVs, a significant increase in TC rates seems unavoidable at this point.
Source: Drewry
